دانلود رایگان ترجمه مقاله اثرات ساختار دارایی نهایی و مالیات حقوقی بر ساختارهای سرمایه ای (نشریه الزویر 2014)

اثرات ساختار دارایی نهایی و مالیات حقوقی بر ساختارهای سرمایه ای: شواهد از تایوان

Effects of ultimate ownership structure and corporate tax on capital structures: Evidence from Taiwan

Abstract

Our study investigates how ultimate ownership structure and the corporate tax rate affect the equilibrium trade-off relation between manager ownership and debt in reducing agency costs. Considering the presence of the controlling shareholder, we find that higher corporate tax rates strengthen the trade-off relation between manager ownership and debt while higher control rights held by the controlling shareholder weaken it as well as the strengthening effect of corporate tax rate. Our study contributes to the literature by revealing tax and ultimate ownership structure dimensions and their interactions as additional determinants of corporate capital structure.

1 Introduction

Manager ownership and debt both reduce agency costs, and they exist in equilibrium in a firm. This study investigates how ultimate ownership structure and corporate tax status affect this equilibrium. The effect of a firm’s ownership structure on performance has received considerable attention in the literature. However, few studies have examined the effects of ownership structure or corporate tax status on capital structure, and they focus on the interaction between manager ownership and debt financing (e.g., Crutchley & Hansen, 1989; Bathala, Moon, & Rao, 1994) or on the effect on debt financing of the tax subsidy for interest payments (Graham, 1996a, 1996b). The exception is Seetharaman, Swanson, and Srinidhi (2001) which has considered the effects on debt financing from both the perspectives of tax and ownership structure.2

In the United States, there is relatively little concentration in ownership structures. In contrast, in East Asia many firms are controlled by a single shareholder (e.g., La Porta, Lopez-de-Silanes, & Shleifer, 1999). In addition, firms in East Asia exhibit far more divergence between cash-flow rights and control rights than do U.S. firms. Control power is often enhanced beyond ownership stakes through pyramid structures or cross-holdings between firms. Moreover, large shareholders have stronger incentives and abilities to monitor firm managers, and the presence of the controlling shareholder can therefore reduce managerial self-dealing. These ultimate ownership structure characteristics suggest that a study of non-U.S. firms can provide evidence of the effects of ownership structure on a firm’s leverage that would be difficult to detect in U.S. data.

Because of the separation of control rights and ownership, firms face agency conflicts between stockholders and managers. Management stock ownership can reduce agency costs by aligning the interests of a firm’s managers with those of its shareholders. However, because of management entrenchment (e.g., Demsetz, 1983; Fama & Jensen, 1983), an increase in manager ownership can be expected to increase agency costs. The relation between manager ownership and agency cost is therefore non-monotonic.

Both debt and manager ownership are devices to reduce agency costs, and a trade-off relation exists between them in reducing agency costs. Consistent with this argument, numerous studies find that manager ownership negatively impacts firm leverage (e.g., Bathala et al., 1994; Chen & Steiner, 1999; Friend & Lang, 1988; Jensen, Solberg, & Zorn, 1992), supporting the traditional trade-off model where firms determine their optimal leverage by weighting the costs (e.g., financial distress) and benefits (e.g., reducing agency costs) of the marginal dollar of debt. Similarly, firms weight effects of agency and entrenchment costs to determine the optimal manager ownership level (e.g., Rozeff, 1982; Schooley & Barney, 1994).